MPs query benefits of private sector in NHS

The Government must encourage more openness and accountability about private sector involvement in the NHS, a Commons report said this morning.

The Government must encourage more openness and accountability about private sector involvement in the NHS, a Commons report said this morning.

The purported benefits of the Private Finance Initiative (PFI) have not yet been proved and there has to be a "rational and objective" debate about the scheme, the health select committee report said.

PFI, which has caused concern among unions, was still being blamed for "numerous ills" which were not directly related to it, MPs on the committee said.

The initiative may have been used as a "convenient scapegoat" for poor bed planning, the report said, adding that PFI did not necessarily lead to cuts in bed numbers.

The report pointed out that it was nearly two years since the committee published its report into consultants' contracts, which expressed "astonishment" that job plans, reviewed annually, were not in place for every consultant.

The committee also said it was difficult to see how the public could be confident it was getting value for money under the concordat between the Government and the private sector on treating NHS patients in private hospitals.

There were very wide regional variations in the costs of work carried out under the concordat, the report said, urging the Audit Commission to urgently review the matter.

The report also expressed concerns of a "postcode lottery" of waiting lists and times because of the geographical disparities in private sector provision.

The report said: "It remains to be demonstrated that greater use of the capacity of the independent sector poses no direct threat to resources in the public sector ...

"PFI is still being blamed for numerous ills not directly related to it, whereas the many benefits ascribed to PFI have yet to be proved.

"The time has come for a more rational and objective debate, and it is the responsibility of the Government to take the lead in achieving this.

"In order to achieve this there has to be more transparency, openness and accountability."

The MPs also raised concerns that no assurance had been given that contract prices between the NHS and the private sector would be protected long-term.

Health Secretary Alan Milburn should commission an independent assessment of the impact on staff of the NHS purchasing private services, the MPs said.

A spokesman for the Department of Health said the report was a "valuable contribution" to the debate about the role of the private sector in the NHS.

"It is particularly encouraging to see that the committee have scotched some of the common myths and scare stories about PFI, for example, the committee points out that on the basis of the evidence they looked at, they don't believe that PFI leads to cuts in bed numbers."

The NHS Plan made clear that ideological boundaries or institutional barriers should not stand in the way of better care for NHS patients, the spokesman added.

New partnerships need to be developed so that the NHS can harness the capacity of private and voluntary providers to treat more NHS patients, he said.

"But these partnerships should not compromise the fundamental principles underpinning the Plan: that health-care should be available on the basis of need, not ability to pay.

"Any agreements also need to be underpinned by high standards of care for patients and good value for taxpayers, and, above all, any capacity used in the private sector must augment, not subtract from, the number of precious skilled clinical staff already working in the NHS."

Private medical insurers welcomed the report.

Mike Hall, chief executive of Standard Life Healthcare, said: "Transparency, openness and accountability are the keys to ensuring an effective partnership between the NHS and private sector.

"Following the commitment to extra funding announced in the Budget to revitalise the NHS, this Government must ensure that the public is receiving the best value for its money."

Mr Hall urged the Government to set up a "robust national framework" to set benchmarks of hospital charges.

Public sector union Unison said it was clear that PFI did not offer value for money.

Unison health secretary Karen Jennings said the report showed the committee had listened to the union's concerns.

"We are glad that it agrees with us that National Audit Office should undertake immediate urgent studies of several major health schemes to establish whether they give value for money.

"And we think it's absolutely right that there should be an independent assessment of the impact of the purchasing by the NHS of activity from independent providers on staff availability within the NHS.

"We have, however, made valid criticisms of the use of the Private Finance Initiative and produced concrete evidence to show that PFI does not give value for money.

"A recent study into Wakefield PFI hospital scheme and recent cuts in Manchester mental health services show that the extra costs of PFI are at the expense of other parts of the NHS.

"It is vitally important that we get things right in the NHS; that we give value for money and that we make sure money is not syphoned away from frontline care to line the pockets of private contractors.

"It is clear to us that PFI does not give value for money - we should move on and look at funding the NHS through the public sector."